Ever feel like your business finances are out of shape? Are they getting a bit too out of breath when they need to climb a hill?
Let’s think of budgeting as your business’s workout plan, and forecasting as checking your progress in the mirror. Together, they keep your cash flow lean, your goals focused, and your operations strong enough to handle whatever the economy throws your way.
Whether you’re running a start-up or steering a growing SME (Small and Medium-sized Enterprise), having a plan in place isn’t just helpful, it’s essential. They aren’t just for accountants; they’re everyday tools for business.
Running a start-up? Steering a growing SME? You’ve got to have a plan.
It’s very easy to just think business budgeting and financial forecasting are only for accountants, but they are everyday tools for business owners who want more control, less stress, and better decisions.
Create Your Core Budget
Let’s start with the financial version of squats and planks: your core business budget.
A solid budget is a roadmap that shows where your money should go and where your priorities lie. You’ve got to start with real data. Grab last year’s numbers and look at revenue, fixed costs (like rent) and variable costs (like stock). History is our greatest teacher, use it to your advantage!
You should also make it a monthly thing. Break down your budget by month so you can spot seasonal trends or dips in cash flow. This is the most logical way to look at your finances.
SMART goals are often slept on, but are a vital and incredibly useful way of viewing your goals. Specific, Measurable, Achievable, Relevant, and Time-bound targets keep your budget aligned with your actual business objectives, and stop you straying too far from your plan.
Lastly, make sure to include a buffer. You absolutely need contingency for those unexpected surprises like equipment breakdown or late-paying clients. No matter how much you plan, something can always come up to derail you, so be prepared.
Your business budget planning should reflect not just what you spend, but also where you want the business to go. Want to hire a new team member? Launch a product? Expand into new markets? Your budget should pave the way.
Flex Your Forecast
Now that your budget is in place, it’s time to forecast the future! No, not with a crystal ball…
Financial forecasting for business is about using the data you have, to make educated predictions about what’s coming next. While budgeting is mostly about managing known quantities, forecasting deals with the unknowns. Think of it as the “what if” part of your planning.
Rather than tackling this alone, many businesses benefit from having experienced input when building financial forecasts. It’s about understanding potential outcomes, from seasonal slowdowns to unexpected growth, and using that insight to make informed decisions.
Forecasts aren’t meant to be perfect. Their value lies in helping you stay agile, plan ahead, and respond confidently as circumstances change.
Stay in Tip Top Shape
Just like fitness, your budget and forecast won’t work if they’re gathering dust on the shelf.
Rather than relying on static figures, it’s important to revisit your financial position periodically. This helps ensure that your plans remain relevant and aligned with your current goals. It’s also a chance to catch early signs of overspending, shortfalls, or opportunities that may have emerged since your last review.
A super great tip: get your lovely team involved. When employees understand the budget, they’re more likely to stay aligned with business goals and don’t count them out! They may even suggest smart cost-saving ideas.
Final Thoughts
Getting “budget fit” doesn’t mean mastering complex spreadsheets or hiring an in-house finance team. It’s about building financial habits that support your business goals and give you the clarity to make smarter decisions.
A little effort now can save a lot of stress down the line – whether it’s avoiding cash shortfalls, preparing for tax season, or knowing exactly when you can afford that next big investment. If you plan effectively, you’ll have a buff financial plan in no time.
How Informed Financial Planning Can Help
Let’s be real, even with a great template and the best intentions, business budgeting and forecasting can still feel overwhelming. That’s where we come in.
At Informed Financial Planning, we work with business owners to take the guesswork out of financial planning. Whether you’re just starting out or already scaling up, we can help you:
- Build a realistic business budget tailored to your goals and industry
- Develop accurate, data-driven forecasts so you’re ready for what’s next
- Review and adjust your financial plans as your business grows and changes
- Identify cash flow gaps and funding opportunities before they become problems
Think of us as your financial fitness coach, here to help you stay on track, avoid missteps, and move forward with confidence.
Want to chat about how we can support your business? Get in touch, no pressure, no jargon, just clear, practical advice.
